The existing telecommunications industry is on edge as Elon Musk-led space company SpaceX is seeking..

The existing telecommunications industry is on edge as Elon Musk-led space company SpaceX is seeking to secure frequencies for mobile communications that can be used across the United States. The move is to enter the U.S. mobile communication market in earnest with the satellite Internet service ‘Starlink’. In response to the news, the stock prices of the three major U.S. telecommunications companies, AT&T, Verizon, and T-Mobile, plunged all at once in after-hours trading.

SpaceX announced on the 8th (local time) that it has signed a contract to acquire a spectrum license for use across the United States from Grain Management, a digital infrastructure investment company. The acquisition target is a frequency license that corresponds to the maximum width of 14 MHz in the 800 MHz band. The deal must be approved by the U.S. Federal Communications Commission (FCC) for it to be finalized. The amount of the acquisition was not disclosed.

Frequency is the channel of radio waves that mobile phones use to send and receive voice and data. In order for a telecommunication service provider to provide stable services, a certain frequency must be secured. In particular, the 800MHz band that SpaceX is trying to secure this time has a relatively low frequency, making it easy to transmit radio waves far away and reach the inside of the building.

“This low-band frequency acquisition addresses one of the last technical gaps needed for Starlink Mobile to grow into a major U.S. mobile operator,” SpaceX said in a statement. CEO Musk also called the contract a “very big deal” on social media X.

CNBC analyzed that this contract is noteworthy in that SpaceX is moving to provide its own mobile communication services without relying on existing telecommunication companies. Until now, Starlink has mainly been in the business of providing the Internet through satellites in areas where ground communication networks are not reachable. Recently, it is expanding its business to mobile phone services through “D2D (Direct-to-Device) technology that directly connects satellites and general smartphones.

D2D is a technology in which smartphones communicate directly with satellites in space without going through base stations on the ground. It enables mobile phone connection even in places where communication networks are insufficient, such as mountainous areas and seas. Through this, SpaceX is aiming for a market that supplements or partially replaces the ground base station-centered communication network established by existing telecommunication companies.

In particular, the announcement was made shortly after major U.S. telecommunications companies began to cooperate with satellite communication except SpaceX. Last week, T-Mobile, AT&T and Verizon established a joint venture centered on satellite communications and D2D services to expand connectivity in areas where communication services are scarce. This cooperation did not include Starlink. T-Mobile previously removed the mention of Starlink from its promotion of its ‘T-Satlight’ service.

Analysts say that SpaceX, which has expanded satellite communication services in cooperation with existing telecommunication companies, is now moving toward direct competition with them.

The market immediately reacted to the possibility of SpaceX’s expansion into the telecommunications market. SpaceX shares, which fell 4% in regular trading on the day, rose about 2% in after-hours trading following the announcement of the acquisition of spectrum. On the other hand, shares of AT&T, Verizon, and T-Mobile plunged together. [Silicon Valley correspondent Wonho-seop]